Fire insurance, as the name suggests, provides the policyholder with the cover for damages and losses caused by the fire accidents. These cover include the destruction of property and the personal belongings kept in the house when the calamity occurred. However, the actual claim, which is to be filed in the case of house fire, can only be calculated after the analysis of the damaged property and possessions post-fire. In such a scenario, the insurance company is accountable to pay the policyholder the maximum amount fixed as per the insurance policy for damages caused by fire. Moreover, there are many other factors, based on your fire insurance policy, that affect the claim amount. Just like the other insurance policies, fire insurance policies, too, come with different categories based on the various factors. Let us take a look at the different types of fire insurance in India here!
When the policyholder takes the fire insurance policy for a lesser amount than the actual of belongings, the insurance company adds an ‘Average Clause’ in the policy. This means, in case of a fire accident, the insurance company pays an average compensation for the loss of property, which is, of course, lesser than the actual damages.
This policy provides the insured with the coverage of all types of damages or losses caused by fire accidents or explosions, floods, earthquakes, burglary, housebreaking, lighting and riots etc. It is also called the 360 degree protection cover policy.
The Floating Policy is most suitable for business owners as it covers all the goods and possessions owned by the same person no matter if all the goods are kept at the same location or not. One thing that the policyholders should keep in mind is that the floating policy always has the ‘Average Clause’ in it.
The Reinstatement Policy provides policyholders with the current market value of the damaged property. This type of policy is known as the Replacement Policy as well. The compensation amount is, of course, calculated after considering the depreciation of the property.
The Specific Fire Insurance Policy covers a specific sum of amount for the damages caused by the fire accidents. The insurance company is liable to pay the full amount for damages to the policyholder. However, the claim can be filed for up to the specific amount as per the policy. In a nutshell, if the losses are more than the insurance policy, the insurer will pay the maximum amount defined in the policy.
Valued Policy is one of the various types of fire insurance policies in India. This policy recommends the insurance company and the policy taker to agree upon a predefined amount to be claimed for a particular possession post damages caused by the fire accident. The current value of the insured possession in nullified in this type of fire policy.
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